Danger Ahead for the State Universities in São Paulo State
Limiting salaries at the top of the career ladder for political reasons will certainly damage a university system that is considered to be among the best in Latin America and that has a fundamental role in the development of Brazil.
I will discuss a rather delicate issue that is now happening in the state of São Paulo that, in my opinion, puts at risk the huge effort made in the last 50-60 years to build an excellent public university system. The topic is complex because it is related to salaries, and, in a country with enormous inequalities, it can be risky, even considered politically incorrect, to discuss salaries of university professors who have contributed more than 30 years of public service. However, I will try to show the situation and the current problem that is causing a lot of discussion and controversies.
The University system in Brazil is composed of public (federal, state and municipal) and private (for profit and non-for-profit) universities. The municipal system is very small, and the federal system is very centralized. All salaries for staff and faculty members are exactly the same for equivalent levels. However, different tracks of each public servant can lead to different salaries over time, depending on their administrative duties, number of years at different levels, external projects, etc. There is a maximum value for the salaries (the so-called “teto” or “ceiling”), which corresponds to the salary of the Ministries of the Supreme Court (in 2014 this is R$ 29.462,25, and will increase to R$ 30.935,36 in 2015, effectively US$ 11,500 per month).
Since 2003 the states can choose to set the “ceiling” for state public servants at 90.25% of the salary of the Ministry of the Supreme Court (today, R$ 26.589,25) or the salary of the Governor of the State. Nowadays, 17 out of 27 States have chosen to have the maximum wage related to the Ministry of Supreme Court. However, the state of São Paulo and nine other states have chosen to tie salaries to the compensation of their governors. As expected, as all the public servants salaries are indexed to that of the Governor, this value can be politically adjusted to prevent an increase of state expenditures.. It is also opens the door to populist-oriented policy, considering that in truth the Governor has so many additional non-monetary benefits (housing, driver, meals, etc..) that he/she doesn´t really depends of the monthly salary to live.
In the state of São Paulo the salary of the Governor is currently R$ R$ 20.,662.00 (around US$ 8,000/mo). To this gross salary, one should deduct several taxes, that add up to around 38%. Thus, the maximum net salary in the state of São Paulo is about US$ 5,000.00 per month, which leads to annual net stipend of around US$ 67,000.00 (based on 13 payments made each year in Brazil). This represents the maximum salary allowed for full professors and senior administrative staff after 20-30 years of dedication to the university.
Evidently, this discussion can be considered politically incorrect in a country where the minimum wage is R$ 724.00 (US$ 280/mo), and the average salary is below R$ 2,100.00 (US$ 800/mo). A gross salary of more than R$ 20,000.00 is considered to be at the top quintile (indeed, with more than R$ 10,000 above the value to be considered as class A, i.e., R$ 10,860.00, in the socio-economic classification). On the other hand, we are talking about the difficult and important development of high quality universities in a developing country. The current parity among the universities and the limit on salaries, hinders the possibility of attracting the best young talent needed to support the development of this rather young university system.
The expected time bomb has been postponed during the last 10 years, because there was a legal issue related to the interpretation of the 2003 law. However, in the last few month the Supreme Court finally decided that all salaries (including those extra incentives that pre-dated the 2003 law) must be restricted to the state-defined limit. Furthermore, the more recent law of transparency passed in 2011, was applied by one of the main Brazilian newspapers (Folha de São Paulo) to force the University of São Paulo (USP) to publish the salaries of all its staff and faculty (see article). This has generated a rather interesting debate in the last few days, regarding complex issues of law, transparency, and the economic crisis, among others. In the short term, it is expected that a rather large number of faculty and staff members who qualify for retirement, will proceed with it, once their salary is reduced. In addition, it will be difficult to find senior faculty willing to occupy administrative positions, such as department chair, undergraduate coordinator, etc., without the award of extra stipends.
Finally, it is important also to consider the important issue the attraction of talent, which is fundamental for the future quality of the research, teaching and services provided by the university, and to keep pace with a globalized world. How can the State Universities of the State of São Paulo maintain their current successful trajectory of development if they will not be able to attract and maintain the best talent? Limiting salaries at the top of the career ladder to a rather low value (compared to the market and to the global higher education setting) for political reasons will certainly damage a university system that has been built with concerted effort, that is considered to be among the best in Latin America, and that has a fundamental role in the development of Brazil.
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